Centre hikes sugarcane FRP to Rs 290 perquintal

Centre hikes sugarcane FRP to Rs 290 per quintal; rules out raising sugar selling price

The Cabinet Committee on Economic Affairs (CCEA) increased the FRP by Rs 5 per quintal as against Rs 10 hike given the previous year

For the current season, sugar mills have bought cane worth Rs 90,959 crore and payments of Rs 86,238 crores have been made to farmers. Credit: Reuters File Photo

Centre on Wednesday fixed the fair and remunerative price (FRP) for sugarcane at Rs 290 per quintal, with the hope of mills buying cane worth Rs 1 lakh crore in the 2021-22 marketing season.

The Cabinet Committee on Economic Affairs (CCEA) increased the FRP by Rs 5 per quintal as against Rs 10 hike given the previous year.

The FRP has been fixed for a minimum 10 per cent recovery and a premium of Rs 2.90 per quintal will paid to the farmers for every 0.1 per cent increase in recovery over and above 10 per cent.

Similarly, there will be a reduction of Rs 2.90 per quintal for every 0.1 per cent decrease in recovery from 10 per cent.

Addressing a press conference here, Food Minister Piyush Goyal said that the government hoped that sugar mills will purchase cane in excess of Rs one lakh crore in the 2021-22 marketing season.

Goyal said the Modi government's policy to encourage exports of sugar and divert the sweetener for production of ethanol has given the mills enough cash to make timely payments to farmers.

He said in the 2019-20 sugar season, sugar mills had procured cane to the tune of Rs 75,845 crores of which Rs 75,703 crores were paid to farmers and only Rs 142 were pending in arrears.

For the current season, sugar mills have bought cane worth Rs 90,959 crore and payments of Rs 86,238 crores have been made to farmers.

In Uttar Pradesh, mills had bought sugarcane worth Rs 27,000 crore and arrears to the tune of Rs 6,399 crore were pending.

“This will be cleared as the mills achieve their export target as the sugar season is not over yet,” Goyal said.

Goyal said the cost of production of sugar cane was Rs 155 per quintal and the FRP was fixed at 87 per cent higher than the production cost.

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